Two lawyers fight over credit for SC striking out of 2 sections of the Companies Act

Stephen Badu, a private legal practitioner, has filed a complaint against his senior colleague at the Bar, Derick Adu-Gyamfi, with the General Legal Council (GLC) over allegations of unprofessional conduct.

Stephen Badu is accusing Derick Adu-Gyamfi of filing a public interest suit with his name (Derick Adu-Gyamfi) instead of that his (Stephen Badu).

According to Badu, he hired Adu-Gyamfi as his lawyer to represent him in a suit he was filing at the Supreme Court of Ghana, seeking that the court strike out two sections of the Companies Act, 2019 (Act 992) as unconstitutional.

However, Adu-Gyamfi filed the suit in his name and took all the glory for it, even though he was not the originator of the suit, details contained in documents shared with GhanaWeb show.

“I approached Lawyer Derick Adu-Gyamfi in my capacity as a client, for him to represent me, on pro bono, to file the aforementioned case at the Supreme Court.

"I made him aware that the case was likely to give him exposure as counsel for the plaintiff. I handed the brief to him and he accepted to represent me,” he said.

Adu-Gyamfi, on the other hand, maintains his innocence.

In a response to the GLC, he said that he was never hired by Badu to represent him as a lawyer and never agreed to represent him pro bono, as he suggested.

He defended himself by stated that he unilaterally filed the suit at the Supreme Court based on his independent research, and without any input from Badu.

About the case:

The Supreme Court of Ghana struck out section 13(2)(h) (i) and (ii)of the Companies Act 2019(Act 992).

The ruling which was done on November 8, 2023, said those sections were inconsistent with Article 19(2)(c) of the 1992 constitution.

According to dennislaw.com, this was the judgment in a constitutional matter filed by a lawyer, Derick Adu-Gyamfi, who prayed to the apex court to inter alia delete, expunge or strike out subsections of the Companies Act, 2019 (Act 992).

The applicant said those subsections; 2(h)(I), 2(h)(ii), 2(a)(i), I(c), etc of Sections 13, 172, and 177 of the Act, are unconstitutional and violate the principle of fair hearing among others.

The sections of the Companies Act that have now been deleted said a person proposed to be a director of a company must not have been charged with a criminal offense.

In legal terms “a proposed director on an application for incorporation to deliver to the Registrar a statutory declaration indicating that within the preceding five years, he or she has not been charged with a criminal offense involving fraud or dishonestly.”

The second part “required a proposed director on an application for incorporation to deliver to the Registrar a statutory declaration indicating that within the preceding five years, that proposed director has not been charged with a criminal offense relating to the promotion, incorporation, or management of a company.”

Meanwhile, article 19(2) (c) of the constitution states that; A person charged with a criminal offense shall be presumed to be innocent until he is proven or has pleaded guilty.

The Supreme Court, therefore, in its wisdom granted the lawyer’s first two reliefs thus striking out sections 13(h((I) and (ii) of the Act as being in contravention of Article 19(2)(c ) of the constitution.

“As such, the applicant per a writ dated March 25, 2022, invoked the original jurisdiction of the apex court seeking among others a declaration that the above sections together with portions of 172 and 177 are inconsistent with the constitution,” the dennislaw.com report said.

Here is how dennislaw reported the defendant's case

On its part, the AG argued that the Companies Act which came into force in August 2019, introduced several new features notable among them is the restraint and disqualification of certain persons from holding the position of director of companies except with the leave of the court.

The AG thus averred that this new provision having been enacted into law by Parliament pursuant to Article 93(2) of the constitution, is sound.

Additionally, the AG impressed upon the court to adopt the purposive approach to interpreting the sections in contention stressing the fact that it is not a novel piece of legislation because institutions like the Bank of Ghana have been applying same by disqualifying directors.

However, the apex court in judgment upheld the applicant's first two reliefs holding that it was unconstitutional to require a person so charged with a criminal offence within the stipulated time to deliver a statutory declaration to that effect and so disqualifying them while they have not been proven or pleaded guilty.

BAI/AE

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